Skip to main content
10:00 am
coming up, we talk to a worker in the philippines about the devastating typhoon and the search for survivors. and the senior communications adviser tells me about the ponti pontiff's social media strategy. he'll send out his first tweet soon. and we talk about the idea of completely eliminating kickoffs and why it could be a good idea. your money starts right now. congratulations, washington. you achieved nothing this week. this is "your money." president obama's offer to avoid the fiscal cliff was laughed at by republicans last week. this week the gop counter offered. theirs, extend tax cuts to the everyone including the rich. $2.2 million in areas from closing loopholes and deductions, savings on health care and cuts in discretionary
10:01 am
spending. other than that, no specifics. president obama said the gop must agree to one thing to get anywhere close to a deal. >> we have to see the rates on the top 2% go up. we're not going to get a deal without it. >> speaker boehner fired back. >> this week we made a good faith offer to avert the fiscal crisis. now we need a response from the white house. we can't negotiate with ourselves. >> here we are just weeks away from going over the fiscal cliff. you probably wonder what's going on in these houses in washington. they put themselves and their political gains first and put their future in prosperity second. hey, you voted them in. remember what happened the last time washington got into a budget battle like this? lawmakers put a band aid on the problem and the u.s. lost its aaa credit rating in the
10:02 am
process. i warned you about the economic storm headed our way, partly because of europe and partly because of this fiscal cliff. i also told you about an american economic renaissance that could be just ahead. just beyond the storm clouds. the fiscal cliff is fixable. every day washington fails to make a deal, more damage is being done. john king, ken rogath is the former chief economist at the international monetary fund and diane swonk joins us from mezro financial. john, some people say don't sweat it. the threat of going over the fiscal cliff is overblown. it will get done in an 11th hour deal. as you read the politics at play, what do you see? >> both sides digging in. you played the president saying, i want that rate hike. the republicans say we'll give you the revenues but not through a rate hike. the president believes he won the election and he upped the
10:03 am
ante saying he wants twice as much in tax revenues than he wanted a year and a half ago. the president believes he has higher ground under this. i think maybe the democrats have a deeper trench, if you will. they have public opinion on their side. if you talk to people in washington there is a sense that at the last minute reason will prevail. there is a not a lot of optimism. you know this and my colleagues know it better than i do. more people are talking about the threat that if you don't deal with it you will send the united states back to recession and the global economy is teetering on recession. the stakes are in their political vaults. maybe they're blind to the enormous stakes. >> let me share something that struck me from pimco, the world's largest bond investor. they make informed bets on economies. here's what bill gross said about what's going on now in the u.s. he said, these structural headwinds cannot just be wished away as we move forward. whether it be to the right, the
10:04 am
left or dead center. those are things like growing debt, globalization, technology and our aging population. that speaks to something i have warned about repeatedly on the show. challenges to the u.s. economy are significant. they come from europe and asia, old infrastructure in the united states, massive debt. americans have a right to expect leaders to tackle large problem. as one of the leading authorities on financial crises, what do we do? >> i think this point that it's not just what happens this month how are we going to move forward, grow this economy because this problem of debt comes from our aging population. you talk about the tax hike we have. it's not enough to close the gap. the idea that the middle class will get away from this without paying most of it. without entitlements being cut,
10:05 am
that's nuts. eventually that will happen. they won't admit it now. we are just beginning. this is a skirmish in a longer war. >> diane, one of the arguments of those that say the fiscal cliff discussion is over blown is deployed at the resilience of the stock market. the s&p is up 12% for the year. that's an okay year. companies have a lot of cash they are holding onto. is too much made of the negative effect of the uncertainty? >> i don't think so. we have seen a lot of the corporate sector uncertainty. we saw consumer sentiment fell among the highest income households. mostly because of fiscal cliff concerns and higher tax concerns. that said, i agree with ken. this is a larger issue that nobody is willing to talk about, the third rail of american politics -- entitlements. we can't raise taxes enough to compensate for what we need in
10:06 am
our democrat kbrafk situation on entitlements. these are fundamental issues. it's important to understand that not only have we seen investment decline and the composition of employment. the manufacturing sector not showing big gains. the investment side of the equation not showing big gains. that shows delays in hiring and defer meant by the fiscal cliff. it's clear that we are at a fork in the road. we can choose to enhance our role in the global economy by taking the situation and making responsible decisions or by deliberately slitting our own economic throats we'll lose what credibility we have left. i think we are at the fork in the road now. >> john, instilling confidence would be a big role for washington. you know, there isn't a great deal of confidence in washington. there is less in congress. at this point are they conscious of what could happen if they make the wrong decision or are they interested in where they will lose core support if they don't make decisions that play
10:07 am
to their bases? >> it's one of the reasons the president thinks he has higher ground or leverage in public opinion. congressional approval ratings though the republican kept the house. democrats picked up a little bit in the senate. the president thinks he has the higher public opinion, public leverage. but they created this cliff. with their short-term bandaid before. the process they created makes it harder to get a solution. everybody knows they have to do something in the short term. that will complicate the big issue. if the republicans give ground on rates you have seen what the base is saying. steve forbes saying fight, fight. pressure the president. then you have democrats, labor unio unions, the aarp saying we don't need to think about raising the retirement age. every time you have a short term play special interest dig in. until they erase the trust deficit, every time they do it
10:08 am
incrementally they make it harder to do the big stuff. >> notwithstanding the problems in this conversation and notwithstanding problems from washington, there is some economic renaissance that's brewing under the surface here. we have an energy boom going on, low energy prices. we have manufacturing output increasing in this country. we have the housing boom with low interest rates to stay for a couple of yearses. is there enough that could happen that could offset what's going on in washington? can we grow our way out of this? >> we can't ignore them. if they blow it, there is nothing we can do. the risks are becoming more balanced where things like the housing recovery, consumer debt coming down are starting to offer the possibility where growth might be stronger although it could be lower.
10:09 am
it's more balanced. i think they will strike a deal. they may go after january 1 so the republicans can say taxes went up. now we're cutting taxes though they give in on the tax cuts for the 2%. >> stay where you are. the unemployment rate is at its lowest point since december of 2008. after the break we'll tell you why it is not as good as it looks. [ nyquil bottle ] you know i relieve coughs, sneezing, fevers...
10:10 am
[ tylenol bottle ] me too! and nasal co [ tissue box ] he said nasal congestion. yeah...i heard him. [ female announcer ] tylenol® cold multi-symptom nighttime relieves nasal congestion. nyquil® cold and flu doesn't. bp has paid overthe people of bp twenty-threeitment to the gulf. billion dollars to help those affected and to cover cleanup costs. today, the beaches and gulf are open, and many areas are reporting their best tourism seasons in years. and bp's also committed to america. we support nearly 250,000 jobs and invest more here than anywhere else. we're working to fuel america for generations to come. our commitment has never been stronger.
10:11 am
10:12 am
the headlines on friday looked greatment unemployment rate drops to 7.7%. 146,000 americans score new jobs but the headlines don't tell the whole story. christine romans has the breakdown of the big report and some of the numbers you need to know about. christine? >> let's go beyond the headlines and look deep inside the numberses at, say, the unemployment rate. the underemployment rate. 40% of people who are out of work have been out of work for six months or longer. underemployment still high. 14.4%. some people call it the real unemployment rate. it's almost double what the headline number is. another big problem. let's look at the sectors that are hiring. retail jobs, 53,000. those retailers are hiring up
10:13 am
for the holiday season. many of the jobs are temporary. it's hard to send a kid to college on the job -- many of these retail jobs. there aren't always benefitses. some place there are benefit ifs you look at the numbers, you can see business and professional services. 43,000 of those. computer systems analysts and related fields have very strong demand and good pay. let's look at the trend. the trend is important. two years of job growth. look how difficult it's been to stay above 200,000 jobs per month. it gets up there a month or two and can't stay up there. we need to see next year some better jobs durability of the recovery. >> this report was supposed to be weak.
10:14 am
super storm sandy, a number of labor disputes and layoffs. the fiscal cliff. we were expecting the unemployment number to go up from 7.9 to 8%. it went down to 7.7. a number of economists thought we'd create 77,000. we created 146,000. before you opine on the report how reliable do you feel the report was? >> well, first of all i think it's important to know there were downward revisions to the previous two months which makes the trend not as good. anywhere 150,000 is not considered significant in the report. you are not capturing because it doesn't fall into the significant range. the survey was taken early in the month. a week earlier than the establishment survey. the household survey on november 5.
10:15 am
it caused insult to injury and more people out of work cancelled flights. it wasn't captured in the unemployment survey. i think they say it didn't affect it but a number of people were affected by the storm conditions. 350,000 couldn't get to work because of weather conditions. >> assume we get over the issues, avoid the cliff. we're still looking at growth in the 150,000. >> it should get stronger over the next couple of years. if it doesn't we're going to stay up at the unemployment rate forever unless people drop out of the labor force. as christine said, you kind of want to get up to 200,000,
10:16 am
250,000 for a really long time to dig out of this. so i do think it will gradually get better. that doesn't mean it will go away in a year. it's going to take several years to get back to normal. barring shooting ourselves in the foot. barring something really bad happening out of europe, i think it will get better than we are seeing it now at some point next year. >> can we talk about the people dropping out of the labor force? maybe this is a question for you, diane. why are people dropping out of the labor force? you said a lot couldn't get to work. what are some of the factors causing people to drop out? >> we're seeing a couple of things. one is the demographic issues as people age. we're seeing people take earlier social security than they would in the past. that's a sign of weakness rather than strength. they have been on unemployment. the benefits have run out. at 62 they don't think they can get a new job. that's an issue as well.
10:17 am
that's very important. also there is some myth when you run out of employment insurance you may not get a job right away. then you have to go back in because you have to pay your bill. these tend to be signs of weakness and demographic issues rather than things we'd like to see going on. that would enhance job creation and economic growth. >> i think it's infrastructure investment. that's the place where we need to do it. it's not going to kick in right away. >> sure. >> this isn't going to go away right away.
10:18 am
getting to infrastructure investment, that's the easy thing. there are other things which are trickier like trying to improve the education system. the fund mental things are what we need to work on. not just that we are growing faster in 2013 but for many years thereafter. >> christine, you make the point all the time. first of all, education, the payback is good. when you look at the numbers and compare the average to those with college degree, it's half. the unemployment rate is half. >> i'm terrified about the kids who haven't had a chance to get in the labor market yet. they have a degree, student debt. they're not in the labor market yet. the first job you have. the first foot on. the first foot on the ladder is
10:19 am
so important to lifetime achievement. it's a country eating your young. good education but there is an opportunity for the education once you get into the labor market. >> christine, diane, ken. thanks for joining us. good conversation about the jobs report. let's see what the future holds in terms of jobs. all right. does this man scare you? if you're a republican in congress the answer is probably yes. in the last three weeks, more lawmakers have said they are done with grover nor quist and his so called taxpayer protection pledge. i will introduce you to two of them after this. we've been there. that's why every bit of financial advice we offer is geared specifically to current and former military members and their families. [ laughs ] dad! dad! [ applause ] ♪ [ male announcer ] life brings obstacles. usaa brings advice. call or visit us online. we're ready to help.
10:20 am
to the number 1 club in the world. the potential of manchester united unlocked. nyse euronext. unlocking the world's potential. you won't take our future. aids affects us all. even babies. chevron is working to stop mother-to-child transmission. our employees and their families are part of the fight. and we're winning. at chevron nigeria, we haven't had a reported case in 12 years. aids is strong. aids is strong. but we are stronger. and aids... ♪ aids is going to lose. aids is going to lose. ♪
10:21 am
10:22 am
get selsun blue for itchy dry scalp. strong itch-fighters target scalp itch while 5 moisturizers leave hair healthy. selsun blue. got a clue? get the blue. well, he might be the most powerful republican in washington. he has not been elected to anything. 238 members of the house and 41 senators in the outgoing 112th congress signed grover norquist's taxpayer protection pledge which is a promise to never raise taxes. at one point not signing the pledge would have been political suicide for republicans. now fears about the fiscal cliff
10:23 am
and america's $16.3 trillion debt are pushing some, seen here, to renounce the pledge. i have been highlighting members of congress who said they are getting over grover. one of those members is tom cole of oklahoma. he signed the pledge and says he's not bound by it anymore. representative cole, a month ago you wrote allowing taxes to rise for just the top bracket may seem an acceptable middle ground by comparison. but this path would be enormously damaging to the economy, which meant you weren't going to do it. now you have been urnling your fellow congressmen to at least extend the bush era tax cuts to those making less than $250,000 and then do battle over tax cuts for the wealthy later. what changed your mind? >> first of all, nothing changed my mind. frankly you mischaracterized my position. i'm not for raising tax rates on anybody. i don't think it's a good idea. bad for the economy. going to slow down, hurt rates. that's my position, not because
10:24 am
i signed a pledge. that's what i believe. what i have said is we agree with the president that taxes on 98% of the american people shouldn't go up. that's 80% of the bush tax cut. we could make it permanent. we are still free to fight another day. i think speaker boehner put out a good position which generate it is revenue he committed to but doesn't raise rates. i would certainly support that position he's done. i'm not for raising rates. i don't see what i proposed as a violation of the pledge. it's not a violation to take a temporary tax cut, make it permanent and still -- >> that's what the debate is about. it's about taking the temporary tax cut -- >> first of all, the debate is about more than that. it's about spending cuts and entitlements. if we can resolve the revenue piece which affects 98% of the
10:25 am
american people we should move to where the debate should take place. if the two sides show on this area -- >> fair enough. representative, here's the issue. you did say let's get a deal done and members of the party said, no, no. >> no. >> come on. your colleagues said that's not the way we are going to go. >> well, they are certainly free to have their opinions. i'm free to have mine. what i think is if we don't act tax rates go up for everybody. the idea that i'm advocating raising taxes because i say to take care of 98% now before the rate hikes go up move it over to
10:26 am
entitlement where it used to be. >> i want to bring in ted yoho from florida's third district. 219 representatives and 39 senators in the incoming 113th congress which you will be a part of signed the pledge. you are not one of them. you say you are not going to sign. when i ask you is it a principle decision about norquist, you don't like pledges or are you actually planning to support a tax hike on the top 2%? >> i didn't sign the pledge because, number one, the pledge i have made is i made a pledge to america. i made a pledge to my wife. signing a pledge isn't going to solve problems. we have a spending problem in this country. i think there are better ways to deal with that. >> i want to go back to congressman cole. i like to take every opportunity to remind americans what the pledge is because we talk about it so much. i have the nor quist pledge. this is the congressional version. i, so and so, pledge to the taxpayers of blank district of
10:27 am
the state of blank and to the american people that i will, one, oppose any and all efforts to increase the marginal income tax rate for individuals and businesses and, two, oppose any net reduction or elimination of deductions and credits unless matched dollar for dollar by further reducing tax rates. i want to hit on something you said earlier that it is current law if we do nothing the bush tax cuts expire and rates go up. is that fancy footwork? >> i'll let grover speak for himself. >> i will try to get as much spending cuts as i can. i'm not voting to raise taxes. i have never advocated that we should. it's a mistake.
10:28 am
it's a spending problem. entitlement reform problem. we're going to have revenue on the table whether we want it or not. i don't think if i allowed tax rates to go up on 90% of the american people or 98% of them when i could stop it, how would letting taxes go up be a violation or make the tax cuts a violation? that's inconsistent. one other item is the payroll tax. nobody seems to be talking about that. if the pledge applies to one, it applies to the other. >> it would be much easier if we didn't have all the temporary measures or pledges. mr. yoho, have you ever spoken to grover norquist? >> i have had the opportunity to speak to him. icon vaed my feelings. he seemed okay with that. i agree with congressman cole. we have a spending problem in this country.
10:29 am
we've got the revenue. we need to get the economy growing to increase that revenue. i just want tori mind you, too, i'm not a member of congress yet. i'm sworn in january 3. after that i will be sworn at, i'm sure. >> you're a lucky guy for the next 30 days. enjoy it. >> gentlemen, thank you very much for joining us. we appreciate it. representative tom cole from oklahoma and congressman elect ted yoho from florida. coming up, low taxes have been an article of faith among republicans for decades. is the gop willing to take us over the cliff to avoid a small marginal increase for the top 2%? we'll delve into the philosophy and the math next. [ ross ] the streets of monaco, home of the legendary grand prix circuit. the perfect place to bring the all-new cadillac ats to test the 2.0-liter turbo engine.
10:30 am
[ engine revs ] ♪ [ derek ] 272 horsepower. the lightest in its class. the cadillac ats outmatches the bmw 3 series. i cannot believe i have ended the day not scraping some red paint off on these barriers. ♪ [ male announcer ] the all-new cadillac ats. bigger! bigger! bigger! bigger! so, which would you rather have -- a big treehouse or a small treehouse? if it's big enough, you can have a disco. oh, yeah! why do you not want a smaller treehouse? because it wouldn't be able to fit a flat-screen tv, and then the tv would be about this big, and you would have to hold the wire, and the position you would hold the wire, you wouldn't be able to see the tv. that's a pain in the buns. yeah. yeah. yeah. yeah. [ male announcer ] it's not complicated. bigger is better. and at&t has the nation's largest 4g network. ♪ bp has paid overthe people of bp twenty-threeitment to the gulf. billion dollars to help those affected and to cover cleanup costs.
10:31 am
today, the beaches and gulf are open, and many areas are reporting their best tourism seasons in years. and bp's also committed to america. we support nearly 250,000 jobs and invest more here than anywhere else. we're working to fuel america for generations to come. our commitment has never been stronger. i have a cold... i took dayquil, but i still have a runny nose. [ male announcer ] truth is, dayquil doesn't work on runny noses. what? [ male announcer ] it doesn't have an antihistamine. really? [ male announcer ] really. alka-seltzer plus cold and cough fights your worst cold symptoms, plus has a fast acting antihistamine to relieve your runny nose. [ sighs ] thank you! [ male announcer ] you're welcome. that's the cold truth! [ male announcer ] alka-seltzer plus. ♪ oh what a relief it is! ♪ [ male announcer ] to learn more about the cold truth and save $1 visit alka-seltzer on facebook.
10:32 am
this changes so frequently but last time i checked the republican counter proposal in the fiscal cliff negotiations still includes bush era tax cuts staying in place for everybody. president obama called that a nonstarter. so what happens if we do actually raise taxes a little bit?
10:33 am
rates will be much lower than what americanss paid a generation ago. in 1980 the wealthiest americans paid 70% of their income to uncle sam. tax reform under reagan reduced that to 50% in 1981. closer to current levels in 1986. today president obama wants to let the bush era tax cuts expire for the wealthy americans only kicking up their marginal federal tax rate from a 35% bracket to 39.6%. we are talking about a 4.6% uptick for households making more than $250,000 a year only on every dollar they make above $250,000. that's why it's a marginal tax rake, only on the money you make on the margin. stephen moore is here from the wall street journal and he's ready to jump out of his skin after i said that. he specializes in telling me why i'm wrong.
10:34 am
and our other guest, david johnston wrote "the fine print." stephen, you are our resident anti-tax crusader. i totally agree every penny counts when it comes to your own money. when you compare the taxes most americans paid in past decades i don't get why republicans are screaming bloody murder about this. what would be so bad with the wealthiest among us chipping in a little bit more? i'm emphasizing just a little bit more. >> when you showed that chart of the tax rates that was exactly accurate. we had 70% tax rates in the '70s. that didn't turn out well. then we cut the rates significantly. went down to 50%, 28%. the rates went up to 35%. i would love to see you super impose on that chart the share of taxes paid by the rich. here is the interesting thing.
10:35 am
one of the reason the deficit went down is you had a big increase in the number of people making money. they paid more tax. nothing wrong with getting rich. the problem we had in the last four years is the number of people who declare million dollar tax filers has fallen by a third. you're just not getting revenues. my point is i don't believe you are going to grow the economy by putting more taxes on people who create businesses and increst. that's what most of the people in the higher income bracket do. i worry it will supress growth starting in the first quarter of next year. >> here's the distinction. is it going to -- are we going to grow the economy more by increasing taxes? are we going to supress growth? maybe not have as much growth?
10:36 am
or will we hurt the economy? the rhetoric on capitol hill is you are going to hurt the economy if you raise marginal tax rates. >> i'm saying that. >> you have been saying it, too, fair enough. >> the empirical evidence isn't there. the average income of americans has been falling since the bush tax cuts. 90% of americans' income has fallen back to the level of 1966, 67. the top 1% of the top 1% have seen their income go in today's dollars from 4 million a year to 22 million a year. the reason for this, i believe, is the tax system. it is redistributing upward. it is not investing in the economy. we are headed toward a third world state with the infrastructure. all the other modern countries of the world are investing in education for young people. we are pulling back on education. why? because people like steve believer nestle and forthrightly
10:37 am
that the problem in america is we don't have enough rich people. they don't have enough money. i would argue the real problem is we are not investing enough in the future entrepreneurs, scientists and inventors. >> this is interesting, stephen. i listen to you from time to time. you said last week republicans should be all about education. >> mm-hmm. >> but not spending on education. >> well, look. i want to challenge the numbers david mentioned. if you look at what happened to infrastructure spending in this country over the last ten years it's gone through the roof. i live in virginia. we are building this absurd rail project out to dulles airport, one of the most expensive products in american history. maybe the biggest boon doggle ever. we are spending a lot on those projects. same with education. >> we are spending 3% of our economy sh not 5% like scandinavians or 9% like the
10:38 am
chinese. >> the test scores are falling. there is no relationship between how much we spend and the results we get. >> i'm talking about higher education, stephen. i don't dispute as someone who teaches at syracuse law school and business school we need to improve student performance tremendously. more importantly, we are not investing in higher education. we are spending less than half as much as the europeans on infrastructure. they don't have roads falling apart and by the way, not fixing our infrastructure is making the economy less efficient. today i had to spend $100 paying the pothole tax to have my car realigned because of potholes. >> real quick. i get so frustrated. we hear we need more public infrastructure. investment. what about private investment? if you look at the gdp numbers what's really fallen off a cliff -- >> stephen -- >> is spending. >> i have been talking about infrastructure. it does work in other countries. would you object to the
10:39 am
government having any role in an infrastructure build in this country? >> if you want more infrastructure, think about 20 to 25% more roads, bridges and repairs. just get rid of the davis bacon act which requires union wages on all of the projects that inflate the cost. it's much more expensive to do a federal project than the private jobs. >> you want the drive down wages. >> david, i want taxpayers to get value for their money. look, i'm saying i don't want 5%, 10% of infrastructure dollars going into the coffers of the labor bosses in america. that's what's happening now. >> it really is an interesting, rich discussion. doesn't answer the question i had which said will we really do a bad thing for the economy? as kiss tasteful as it seems to you would we do a bad thing for the economy if we went from 36% to 39.6? >> let's say the republicans and
10:40 am
i think in the end of the day they will give barack obama his tax increase on the rich. but you know what? we go into 2013 with still a trillion dollar a deficit. the question i ask you two and president obama is what's act two? what do we do next? >> he lumped us all in together. david, you do agree with stephen an one thing. there is work to be done on curtailing inefficient spending? >> there always will be. that's shooting fish in a barrel. the best funded program we have is social security. we shouldn't talk about cutting it. health care. for every dollar the other three modern countries in the world spend per capita in comparable dollars, we spend $2.64. we still have 50 million people without insurance. if we could get france's health care system, widely regarded as the best in the world we could eliminate social security taxes or 80% of individual income taxes and have the same deficit. by the way, if you look at the federal budget numbers the federal budget deficit is coming
10:41 am
way down. the economy is improving. higher taxes allow us to create jobs by investing in things that work it. if we replace foundations of granite with sand and that's where steve's ideas lead to, our super structures have to collapse. >> you know, david, i'm hearing three words from you. tax and spend. >> we'll leave it at that. we'll have a rematch to continue the conversation. we don't want to not pay our bills, so i have to take a break. what a great conversation. thanks to you both for bringing the viewers great ideas. stephen moore from the wall street journal and david cay johnston, author of perfectly legal, the covert campaign to benefit the super rich and cheat everyone else, among other books. i have been warning you about the fiscal cliff for months. i call it the economic storm of our own making. some of you think the talk is overblown. will a failure by washington to
10:42 am
avert the fiscal cliff mean catastrophe for the u.s. economy? i'll debate with richard quest next. zza!!!!! [ garth ] olaf's small business earns 2% cash back on every purchase, every day! helium delivery. put it on my spark card! [ pop! ] [ garth ] why settle for less? great businesses deserve the most rewards! awesome!!! [ male announcer ] the spark business card from capital one. choose unlimited rewards with 2% cash back or double miles on every purchase, every day! what's in your wallet? (announcer) when subaru owners on elook in the mirror,y day! they see more than themselves. so we celebrate our year-end with the "share the love" event. get a great deal on a new subaru and 250 dollars goes to your choice of five charities. by the end of this, our fifth year, our total can reach almost 25 million dollars. it's a nice reflection on us all. now through january 2nd.
10:43 am
and his new boss told him two things -- cook what you love, and save your money. joe doesn't know it yet, but he'll work his way up from busser to waiter to chef before opening a restaurant specializing in fish and game from the great northwest. he'll start investing early, he'll find some good people to help guide him, and he'll set money aside from his first day of work to his last, which isn't rocket science. it's just common sense. from td ameritrade.
10:44 am
10:45 am
time for some q & a. just over three weeks to make a deal and lawmakers in washington continue to push america's economy toward a fiscal cliff. both sides promising to cut trillions in government spending over the next decade but republicans insist it could be done without raising taxes on the rich. president obama ib cysts it's a nonstarter. it's a mess. no one can argue that. what happens if there is no deal? are we, as some argue, making too much of the fiscal cliff deadline? would it be a catastrophe to hit it, go over it? maybe for a while. joining me from london, the host of quest means business on cnn
10:46 am
international. i have 60 seconds to set you straight on this. i'll go first. [ bell ringing ] all right. it could be catastrophic if congress doesn't get a deal by january 1. the government will try to soften the blow of spending cuts and tax increases. they could delay the withholdings that people pay though tax rates are going up or they could tell agencies to accelerate the spending at the new year to mitigate cuts that are coming. that assumes congress will do something. otherwise it could be catastrophic. i say, don't count on it. if a deal can't be cut in three weeks why should we assume they will cut one in january, especially when almost nothing gets done in the january of a new administration. this is a lame duck congress waiting for a new congress to be sworn in. think back to the debt ceiling, richard, when nothing got done there. think back before that to the discussions about t.a.r.p. when nothing got done and the market had to force it. the bottom line is i am not convinced that they will do
10:47 am
things to avoid the catastrophe. the fiscal cliff isn't catastrophic. congress's inability to ever foresee dangers and avoid them is. [ buzzer ] richard, you seem be bored by my answer. >> all right. so you want to play hardball. [ bell ringing ] you want to play hardball with international economics and see just what might happen. of course nothing will happen on january 1, the moment the fiscal cliff arrives. it's going to be a slow drip, drip, drip effect as people realize a slowing in spending, the taxes go up, consumers are worried. it won't happen overnight. there's going to be no dramatic over the cliff we go. instead, you will see an evaporation of confidence. you will see an evaporation of business decision-making. that is where the tumor and the cancer will begin. in the united kingdom we have
10:48 am
just had higher borrowing numbers and lower growth forecasts. just last week the ecb came out with dreadful, dreadful numbers on how the euro zone is performing. recession this year and possibly next. and you want to play games with something as important as the u.s. budget? i'm going to finish here. the core worry is three weeks out and an inability to do a deal. >> right. so the catastrophe may not come january 1, 2 or even the 30th, the catastrophe is long term because of the erosion of public confidence in the united states. richard, thank you my, my friend. >> it's happening now. >> absolutely. we see it in the jobs numbers. that's right. >> while you and i enjoy our weekend it is happening. >> you are right. we are agreed on this one. richard quest, host of "quest means business" on cnn international. catch him when you're on the
10:49 am
road. trucks like these transport everything from food to washing machines to the earmuffs you ordered online. with the cost of diesel rising america's trucking companies are looking elsewhere for fuel. i'll tell you where they are looking after this. you're watching "your money." this is cnn.
10:50 am
10:51 am
when you take a closer look... the best schools in the world... see they all have something very interesting in common. they have teachers... ...with a deeper knowledge of their subjects. as a result, their students achieve at a higher level. let's develop more stars in education. let's invest in our teachers... they can inspire our students. let's solve this. to provide a better benefits package... oahhh! [ male announcer ] it made a big splash with the employees. [ duck yelling ] [ male announcer ] find out more at... [ duck ] aflac! [ male announcer ] ♪ ha ha!
10:52 am
america is in the middle of an energy boom. the u.s. has become the so-called saudi arabia of natural gas. production has soared 26% in the last five years. that's pushing the price of natural gas down. it now costs less than half of what it did five years ago. in 2011, natural gas, 99% of it, went to residential, commercial, and industrial use or was used to create electricity. less than 1% used as vehicle fuel, but trucking firms are looking to push that higher. why? why does anyone do anything? cost. we have seen strides in battery technology, 18-wheelers can't be run on electric power just yet. diesel is costly. prices have dropped, they did drop down to $2 a gallon in
10:53 am
2009, but they have doubled since then. a gallon of diesel costs between $1.50 and $2 more than the equivalent in natural gas. that means the increase in cost of a natural gas powered truck could be paid off in a couple years. >> reporter: diesel is king here at the flying j truck stop near richmond, virginia. with it, nathaniel has pushed his rig 3.5 million miles. >> you name, i've hauled it. >> reporter: but truckers here don't have to look far to see the corner. a new liquefied gas island. ong is cheaper, cleaner, and supporters say, more plentiful than diesel. but there's a problem. say you want to drive a truck like this coast to coast, using only liquid natural gas. here's what you would be up against. these are the only open and
10:54 am
public lng fueling stops across the country and there are only actually 30 of them. a tank of lng would take you about 700 miles, so going westward from washington, d.c., unless you go completely out of your way, you would run out of gas just outside of nashville. it's what the industry calls the chicken and egg dilemma. what comes first? new trucks or new pumps? the american trucking association's recently held a sold-out summit about just that. >> it's going to happen, i promise you it's going to happen. >> texas oil man turned natural gas pruseder t. boone pickens said henry ford faced the same problem. >> if someone said, henry, have you thought about it? you don't have filling stations. he said, oh, gosh, i never thought about that. i'll forget this idea. that's not what he said. don't worry about it. you'll get filling stations. if the car shows up, the filling stations will come. >> by spring, the number of lng
10:55 am
stops will sky rocket to about 150. but when they'll open is uncertain. you would think environmentalists would be thrilled at the prospect of replacing dirty diesel with clean natural gas. not quite. >> we think a rush to liquefied natural gas is a mistake. >> while natural gas may burn cleaner, problems arise when the gas leaks. >> the leakage of that gas itself is such a potent greenhouse gas. 70 times more potent than carbon dioxide. that undermines the greenhouse gas advantage. >> bottom line, the industry says lng is cheaper than diesel fuel. >> but i think it will work in the end. >> just a matter of time? >> matter of time. >> don't be looking for liquefied natural gas powered cars anytime soon. automakererize starting to develop cars that run on compressed natural gas, cng, but with just 536 public cng filling
10:56 am
stations across the country, the u.s. is still years away from powering its cars using natural gas. natural gas is just one of the things that could make 2013 a great year for the u.s. economy. is the doom and gloom surrounding the fiscal cliff obscuring an economic resurgence? they've been commitd to putting clients first. helping generations through tough times. good times. never taking a bailout. there when you need them. helping millions of americans over the centuries. the strength of a global financial leader. the heart of a one-to-one relationship. together for your future. ♪
10:57 am
to the number 1 club in the world. the potential of manchester united unlocked. nyse euronext. unlocking the world's potential.
10:58 am
10:59 am
with odor free aspercreme. powerful medicine relieves pain fast, with no odor. so all you notice is relief. aspercreme. a positive jobs report on friday serves as another reminder that the fiscal cliff may be obscuring the fact that america is actually poised for an economic renaissance. short-term indicators are looking good. jobs are being created. consumer debt is shrinking. goldman sachs said last week despite a market rally this year, stocks can rise another 10 to 15% in 2013. forget silver lining. how about the golden lining around the economic cloud? with mortgage rates expected to stay low through 2014, home affordability is as good as it's been in generations. that's going to attract buyers who have b

Your Money
CNN December 8, 2012 10:00am-11:00am PST

News/Business. Ali Velshi. CNN anchors break down the financial news of the week. New.

Network CNN
Duration 01:00:00
Scanned in San Francisco, CA, USA
Source Comcast Cable
Tuner Virtual Ch. 759 (CNN HD)
Video Codec mpeg2video
Audio Cocec ac3
Pixel width 1920
Pixel height 1080
Sponsor Internet Archive
Audio/Visual sound, color
disc Borrow a DVD of this show
info Stream Only
Uploaded by
TV Archive
on 12/8/2012